fig. 1 Perceptions of corruption in institutions

for assessing an index. However, a consensus among evaluators is not proof of validity; this would require independent evidence of corruption. Credibility provides an alternative criterion for evaluation. An index labelling Scandinavian countries as having much less corruption than Russia and Nigeria is more credible than armchair critics saying we don’t know enough to estimate how the scale of corruption differs between countries.

A variety of corruption measures are now in circulation (see Heywood 2015). The CPI of Transparency International and the World Bank’s Control of Corruption Index (CCI) have global coverage, thereby permitting comparisons between high-income and low-income countries across cultures and continents. The most widely used measure of corruption is the Transparency International Index. A Google search shows the CPI has three times the results of the World Bank Index.

The Corruption Perceptions Index. Transparency International launched the CPI in 1995 to assess corruption in national governments around the world. It was based on the research of a young econometrician then at the University of Göttingen, Dr. Johann Graf Lambsdorff (2007: 20–26, 236–255). While the CPI assigns a single numerical score to a country, in recognition of uncertainties about the reliability and validity of any single source of evidence, the CPI uses multiple sources with different ways of making up its composite rating of a country. It combines up to a dozen quantitative assessments of corruption from a multiplicity of sources that cover many countries. These include the African Development Bank, the Bertelsmann foundation, the Economist Intelligence Unit, freedom House, the Political and Economic Risk Consultancy, the World Bank and the World Economic forum. Transparency International publishes details of the sources it draws upon and the methods it uses to create its index (www.transparency.org/cpi).

The assessments that CPI sources make are based on the perceptions of corruption held by people who have knowledge and sometimes experience of how a national government deals with capital-intensive projects. They include a mixture of national citizens and expatriates working on national projects potentially vulnerable to demands for bribes by public offcials. To complement any potential bias this group may have, the Index also receives inputs from non-resident experts who tend to favour universalistic standards. Notwithstanding differences in perspectives, the assessments of domestic and foreign experts tend to correlate highly with each other (Lambsdorff 2007: 23). To avoid confating the views of experts with the mass public, Transparency International does not

include the results of mass opinion surveys in its CPI ratings. Since the experts on whom it relies for input are best able to judge the behaviour of national elites responsible for large procurement contracts, the CPI is an assessment of capital-intensive grand corruption.

While all the sources incorporated in the CPI are concerned with corruption in some form, in the absence of an agreed defnition and methods they differ in the evidence and criteria used in making national assessments. Therefore, Transparency International requires a minimum of three sources before it will rate a country. The underlying assumption of using multiple sources employing different defnitions is that inconsistencies between them will tend to cancel each other out. However, they may also refect categoric differences that make them incommensurable. The technical report accompanying the annual CPI rating includes the statistical standard error and confdence intervals for each country’s score.

The CPI places each country on a scale ranging from 0 to 100; this permits a far greater degree of differentiation than sorting countries into two categories, corrupt and high in integrity. Of the 176 countries assessed in the 2016 CPI, Denmark and New Zealand have the highest rating, 90, while Somalia is lowest, 10. There is a tendency for bad governance to be more common; the median country has a CPI rating of 38, signifcantly closer to the most corrupt country than to the highest-rated country.

Global comparison shows that generalizing about corruption in countries grouped according to geography or culture is misleading (fig. 1). Variations in national context within continents are greater than differences between the mean rating of continents. In Asia, there is a spread of 74 points between Singapore and North Korea. This shows that so-called Asian values are neither conducive to corruption nor to high levels of integrity (cf. Zakaria 1994; fukuyama 2001). African ratings likewise reject generalizations about continent-wide African cultural values (Ekeh 1975), because there is a range of 50 points between the CPI ratings of Botswana and Somalia. The range between countries in Latin America, the Middle East and North Africa is likewise large. The successor states of the Soviet Union and their Central Asian neighbours show the least variation. This homogeneity refects the common experience of generations of having been governed in accord with the Marxist–Leninist principles rather than bureaucratic procedures.

Corruption Perception Index

100

Europe Asia Latin MENA Africa Ex-Soviet 90 America Denmark

84 Singapore MEAN

80

60

66

71 Uruguay 66 UAE 60 Botswana 57 Georgia

40

41 Bulgaria 41 42

37

31 31

20

0

12 N Korea

17 Venezuela 13 Syria Yemen

10 Somalia

21 Uzbekistan

Fig. 1 Big variations in corruption within every continent (Source Transparency International Corruption Perceptions Index for 176 countries, 2016. AngloAmerican countries: New Zealand, 90; Canada, 82; Australia, 79 and the United States, 74)

High CPI ratings are not confned exclusively to countries with European values and culture. Among European Union countries, there is a spread of 49 points between the highest-ranking country, Denmark, and Bulgaria, and 46 points between Denmark and Greece. Singapore has a better CPI rating than 24 member states of the European Union. Of the 68 countries that have a better rating than the lowest EU member states, 32 are developing or newly developed countries from outside Europe and the Anglo-American world.

The CCI of the World Bank is one of the six components of its Worldwide Governance Indicators (www.worldbank.org/governance/ wdi) programme created to focus on the effect of governance on economic development. Since launching in 1995, the CCI has achieved coverage of 215 states and territories. Its ratings are a composite of assessments made

by a variety of intergovernmental organizations, international non-government agencies, academic institutions, and proft-making consultancies. Consistent with the idea that corruption is part of a syndrome of characteristics of governance (Johnston 2014), the CCI combines indicators of capital-intensive corruption and surveys of the payment of bribes by individuals and small enterprises. The indicators are reduced statistically to a single rating that tends to refect the performance of national governments relative to each other rather than their absolute degree of corruption (Kaufmann et al. 2010). The CCI ratings are redundant; it correlates 0.98 with the CPI.

No short-term change. Neo-institutional theories of reducing corruption predict that changes in political institutions ought to change the behaviour of offcials. foreign donors give money to corrupt governments to support institutional reforms intended to reduce corruption. In an era, in which quantifed ratings are regarded as hard, objective evidence, foreign aid agencies would like an Index to show a prompt, positive change to justify the spending of billions of dollars annually aiding governments that are more or less corrupt. Governments receiving foreign aid are very ready to publicize Index changes that show an improved rating from one year to the next, while domestic critics are ready to call attention to a fall in the country’s CPI rating. Since more attention is given to national rankings than scores, it is possible for a country’s governance score to improve while its ranking falls, if other countries show more improvement or if the number of countries ranked increases.

In order to evaluate whether anti-corruption efforts have had a positive impact, policymakers want evidence of a quick fx, that is a year-onyear reduction in corruption. The demand for annual evidence implies a belief that governance can be altered within 12 months by a single policy intervention, a change in a country’s leadership or the creation of an institution recommended by international advisers.

The CPI provides quantitative evidence of change for the period since 2012. Since then, national ratings have tended to be stable. The yearon-year correlation between country scores in 2015 and 2016 correlate 0.990 and between 2012 and 2016 they correlate at the extremely high level of 0.976. from year to year ratings persist, whether of good or bad governance. This suggests that once a country has achieved a high standard of governance, the norms of public offcials and mass expectations keep corruption low. In a complementary manner, a country with a high degree of corruption tends to remain in a low-level equilibrium trap.

Limitations of national corruption indexes. Corruption indexes are constructs created by professional experts who specify criteria for data that can be aggregated into a single quantitative score. In principle, this is no different than statistics about GDP, which is a construct created by aggregating many different economic indicators into a single score. No one has ever seen the billions or trillions of dollars reported as GDP. Whereas people can have the frst-hand experience of corruption at the grass roots, no one can directly observe corruption in the political system as a whole. At the national level, it is a social construct.

To compensate for numerical indexes having no intrinsic meaning, Transparency International publishes its annual index in a league table that ranks countries from the highest in integrity to most corrupt. A bold headline asks: ‘176 Countries. 176 Scores. How Does your Country Measure Up?’ A consequence of league-table rankings is that 175 countries cannot be top. Thus, American journalists can headline that the United States only ranks 18th rather than frst in the world even though its score places it in the top 11% of countries. A headline rise or fall of a few places in the ranking of a country is a verifable ‘fact’, but a generous allowance needs to be made for fuctuations due to defciencies in measures. Moreover, there is a tendency for countries to cluster together in their ratings; in 2015 there were 16 countries with ratings between 30 and 32. Thus, a statistically insignifcant random fuctuation of a few points could see a country’s ranking rise or fall more than a dozen places.

A variety of alternative measures have been developed as proxies for corruption. A single case of grand corruption publicized in the media and confrmed by a judicial fnding is factual evidence that corruption has occurred. However, it is impossible to know whether a single case represents widespread corruption or is newsworthy because it is an exception to normal public administration. Offcial data about the extent of corruption-related crimes in a country is sometimes used as evidence of corruption (see e.g. Glaeser and Saks 2006). However, by defnition, this excludes unrecorded cases of corruption. In a country in which there is a relatively high level of corruption, legal authorities are likely to be subject to political pressures to ignore situations where there are wellfounded grounds for prosecution, for example public offcials enjoying a standard of living far above what their offcial salary could support.

Given the multiplicity of corruption measures now in circulation, the United Nations Development Programme has published a user’s guide to aid policymakers in evaluating alternatives. It recommends